Toy stores scrambling to deal with Fisher-Price recall over lead paint

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Toys R Us held a nationwide conference call yesterday afternoon with representatives from all of its 500-plus U.S. stores to discuss how they were handling the recall of almost 1 million Fisher-Price toys suspected of having paint with excessive levels of lead.

This is not the discussion toy retailers want to have about beloved characters such as Elmo, Big Bird and Dora The Explorer. But when Fisher-Price owner Mattel alerted retailers recently to the problem, industry players moved quickly to pull merchandise, notify employees and reassure consumers.

Wal-Mart placed an electronic block in its cash registers so customers could not inadvertently buy the affected items. Target was careful to explain it had only carried about one-third of the 80-plus items affected. KB Toys posted the recall notice on its Web site.

Mattel announced plans to conduct a thorough investigation of how its long-term supplier could slip up this way, placing both children and the company's reputation at risk.

"We are investigating the cause to ensure such events do not reoccur," said Jim Walter, Mattel's senior vice president of worldwide quality assurance, in a prepared statement.

But some observers think such events, in fact, will reoccur as the toy industry -- like many others -- struggles to balance the demand for inexpensive products with the problem of controlling quality in a developing country.

"We're seeing that the system has got a lot of holes," said Sally Greenberg, senior staff attorney at Consumers Union, the parent organization for Consumer Reports magazine.

Recalls aren't new but awareness of safety concerns was raised earlier this year with the high-profile recall of 1.5 million Thomas & Friends wooden railway toys, seemingly well-made products contaminated with lead paint, which is toxic if ingested by young children. The China connection, in particular, seemed significant in light of problems with toothpaste, seafood and pet foods.

In July, President Bush appointed an interagency working group to study import safety, chaired by the secretary of Health and Human Services.

The toy industry is especially concerned because it buys so much from China. Industry groups estimate about 80 percent of toys are made there. And toys are used by a vulnerable population -- children.

"It looks to me like it's going to be an ongoing problem until they figure out a way to manage it," said Nadine Shingleton, co-owner of Playthings Etc., a family-owned specialty toy store along Route 8 in the Butler County community of Clay.

But, she added, "I don't think it's going to be our problem." The store tends to carry items that can't easily be found in the big chains. Fisher-Price items, for example, are carried by mass merchants so they aren't on the shelves of Playthings Etc.

While the store carries some products made in China, Ms. Shingleton is confident the higher-end manufacturers she buys from focus on quality control.

S.W. Randall Toyes & Giftes, a Pittsburgh retailer with four locations, also tries to buy from specialty vendors whose products can't be purchased from a big competitor and who invest heavily in quality control. "Our companies are really particular," said owner Jack Cohen.

Still, it is impossible to avoid carrying goods made in China. He cited the example of Swedish toymaker Brio trying to keep production in Europe but losing sales to cheaper competitors. If parents don't see an obvious difference between two products, they'll try to stretch their limited budgets as much as possible.

Small retailers have to depend on manufacturers to monitor their plants. "We can't have a testing department," Mr. Cohen said. S.W. Randall didn't carry the Fisher-Price items in this week's recall but it was caught with a few of the Thomas items.

Even putting internal controls in place is no guarantee. Toys R Us had been working to improve its systems for several months. "We don't want to be selling unsafe toys," said company spokesperson Kathleen Waugh.

In addition to setting standards for its suppliers, for the past year the retailer has had an independent lab pulling items randomly from store shelves to test for problems. An internal safety council was created months ago as was a position for a new vice president for global sourcing.

So far, consumers have been inclined to trust that the toys they're buying are safe. The Consumers Union would like to see improved government checks and controls to make sure that trust is well-founded.

In the meantime, the businesses hurt by recalls are promising to get tough if necessary. Mattel, which indicated in a regulatory filing yesterday that the total impact of this recall and some smaller ones could be about $30 million, said it will take appropriate action if it finds its supplier ignored safety procedures.

Toys R Us, too, will be very interested in learning where the system broke down. "There will be conversations," said Ms. Waugh.